This paper provides new evidence on the disruption brought by the coronavirus (COVID-
19) pandemic to local labour markets in the U.K.. After presenting key trends on local
labour markets, a matching function is estimated using monthly data on vacancies and
unemployment. This matching function is specified to capture local variations in efficiency.
These estimates of labour market efficiency are then included in an individual-level
regression of year-on-year transitions between employment, unemployment and inactivity.
The results show that, for males, living in an area with a more efficient labour market pre-
COVID was associated with a reduced likelihood of being unemployed in 2021 but that for
females there was no such association.
